Atmos, cities reach settlement on rate increases

Published 6:00 pm, Thursday, January 10, 2008

Customers of Atmos Energy Corp. in 151 Texas cities will see their monthly bills increase by about 20 cents in March under a tentative agreement reached with the natural gas provider Friday.

The cities represent more than half the 1.5 million residential customers in the Mid-Tex Division, which covers a large swath that includes Austin, Midland and North Texas.

Prior to the agreement, the increase Atmos planned to request in the fall would have raised monthly bills by an average of $1.50. The agreement is still subject to approval by city councils, which are part of the Atmos Cities Steering Committee.

"I'm never pleased to see an increase, but I think it's the best possible outcome for consumers," said Geoffrey Gay, attorney for the ACSC.

The agreement resolves a rate case filed by the Mid-Tex Division with the cities in September.

"We are pleased to reach a fair and reasonable agreement that allows us to continue the delivery of natural gas and recover the costs related to serving customers," said John Paris, Atmos Energy's president of the Mid-Tex Division.

The agreement settlement also includes a rate review mechanism, effective for a three-year trial period, to reflect yearly changes in the division's cost of services and rate base.

In connection with the rate review mechanism, to be implemented on Oct. 1, the monthly residential customer charge will be reduced from $10.69 to $7.00. Atmos spokesman Rand LaVonn said the consumption fee will be increased at that time.

There will also be an authorized return on equity of 9.6 percent. A new program to encourage natural gas conservation will also be funded annually from equal $1 million contributions from the Mid-Tex Division and from funds collected from customers through a new customer tariff.